The leadership role of Corporate Sector in the race for decarbonization was the theme of this thought-provoking debate hosted by The Energy Council.
The debate counted with experts from Telefónica, Philip Morris International, Danske Bank, Innogy Ventures, Elgin Energy and SmartEn Smart Energy Europe.
I argued that the private sector is a principal driver of decarbonization, reducing carbon emissions, due to three reasons. First, corporates are flocking to adopt carbon neutrality. Second companies have the tools and resources to implement the change. And finally, companies have a key position to influence different parts of our society.
Companies leading decarbonization
- Climate change is one of the major threats humanity has ever faced, and solving it requires drastic reductions of carbon emissions. In particular, in order to limit global warming to 1.5 degrees Celsius, we need to achieve carbon neutrality by 2050. Companies, mostly after the 2015 Paris Agreement, have increasingly jumped into decarbonization and committed to carbon neutrality before 2050. As an example, 155 companies worth US$2.4 trillion have pledged under the SBTi to align their emissions reductions to the latest climate science. Some reasons are reducing climate-related risks, reduce costs and attract capital and talent.
- Resources, companies have budgets to invest, skilled professionals and access to experts from universities and R&D institutes. These resources allow them to be ahead in the curve of the energy transition. Working in a multinational, I see how carbon neutrality has boosted our efforts. We have increased energy efficiency, sourcing and investing in renewable energy (read about sourcing green energy here) and compensating remaining emissions using nature-based solutions. From the design of the products to the sourcing of materials or discussing with consumers and investors, carbon reductions are becoming an integral part of our companies.
- Influence, companies have employees, face investors, listen and interact with consumers, operate trans-nationally and source products and services from suppliers. To start with, companies embedding carbon neutrality are catalysing the development of new clean technologies. Besides, they influence policymakers and help them shape legislation. On top of that, corporates increase confidence in investors, consumers, and employees by sharing their transparently their progress. Finally, sustainability leadership is cascaded down to corporates’ suppliers (read how here). As an example, at PMI we source from +30,000 suppliers which we support in their carbon emissions reductions. Above all, companies have the privilege and responsibility to influence these groups to make our world carbon neutral.
For these reasons, I see at this point in time leading the transition to a low carbon economy. This role, requires the right policies and incentives by governments, investors building climate-resilient portfolios and consumers making the right choice when choosing products and service they buy.
You can watch the full debate here